Safeway's deal with union raises heat on Raley's [The Sacramento Bee] - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Meet our Editorial Staff
    • Advertise
    • Contact
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
Newswires
Newswires RSS Get our newsletter
Order Prints
November 9, 2012 Newswires
Share
Share
Post
Email

Safeway’s deal with union raises heat on Raley’s [The Sacramento Bee]

Dale Kasler, The Sacramento Bee
By Dale Kasler, The Sacramento Bee
McClatchy-Tribune Information Services

Nov. 09--Raley's found itself on the defensive Thursday after the grocery chain's striking labor union agreed to a new contract with rival Safeway Inc.

Safeway, the second-largest grocer in the Sacramento market, announced a tentative agreement with the United Food and Commercial Workers. The deal protects the union's existing health insurance program -- the issue that's driven a wedge between the UFCW and Raley's.

With the Raley's walkout entering its sixth day today, the union's agreement with Safeway will put pressure on the West Sacramento grocer to settle as well.

Striking workers will likely step up their efforts to persuade Raley's customers to shop instead at Safeway or the region's other unionized chain, Save Mart Supermarkets, which made its own deal with the UFCW in September.

"I think Raley's is in a very tenuous position," said Ken Jacobs, a labor relations expert at UC Berkeley. "This isolates them further."

Yet Raley's, which has kept all of its stores open, didn't sound like a company backed into a corner.

In a prepared statement Thursday, Raley's said the Safeway deal "has no impact on our ongoing contract dispute."

"We chose to negotiate on our own with the union because of our specific situation and need to reduce our operating costs," the company added.

Raley's says it is losing millions of dollars a year as it struggles against a wave of nonunion competitors.

The company disclosed Thursday that it has hired 500 replacement employees to work alongside union members who have crossed the picket lines. Although business has suffered because of the strike, Raley's says revenue has been improving in recent days.

Experts said Safeway, while facing many of the same competitive pressures as Raley's, remains profitable and can afford to be more generous with the union.

In particular, the Pleasanton-based chain was able to give the union a crucial benefit that Raley's has so far refused to offer: preservation of the current health plan, including coverage for retirees. That's a major sticking point in the Raley's dispute.

Normally, terms of a tentative contract aren't made public until workers have a chance to vote on it. This time, both Safeway and the UFCW announced the current health plan would remain intact.

"Safeway agreed to retain and fund the union's health benefit plan, the same plan Save Mart agreed to earlier this summer," said Jacques Loveall, president of Roseville'sUFCW Local 8, in a memo on the union's website.

"The only company remaining to sign on to the union's plan is Raley's," he added. "We will not let up on Raley's until they come to their senses."

Safeway regional President Karl Schroeder, in a news release, said the contract "provides our employees with among the best wages, benefits and working conditions in the region, while ensuring the company can compete successfully in the future."

The statement suggests Safeway did obtain cost savings from the union, but neither side would divulge details of the contract.

All three union grocers in the region, not just Raley's, say they need concessions. The Save Mart deal includes such concessions as the elimination of bonus pay for Sunday shifts. And, for the first time, Save Mart workers are contributing to health insurance premiums for family members.

Ratification of the Safeway deal, which could take several weeks, is no sure thing. Members of three bargaining units, Local 8 plus two locals in the Bay Area, must weigh in.

It took the union two tries to implement the Save Mart contract. Local 5 in San Jose voted it down both times. But because the "no" votes fell short of the two-thirds needed to call a strike, Local 5 leaders invoked union rules and declared that the contract was approved.

Safeway has been eager to reduce its labor costs in Northern California. A national chain, it has said for years that its wage and benefits package in this region is the highest it provides anywhere in the country.

Company spokesman Brian Dowling said Safeway provides retiree health care in several of its other markets. "The cost is obviously significant," he said in an email.

Still, Safeway is considerably healthier than Raley's and more capable of shouldering the expense.

With $43 billion in annual sales, Safeway is more than 10 times Raley's size. Privately owned Raley's says it is losing money, while Safeway reported $311 million in earnings from continuing operations in the first nine months of 2012, slightly better than last year.

Perhaps most important is Safeway's geographic diversity. The chain stretches from Hawaii to New Jersey. Although it controls the second biggest market share in greater Sacramento, behind Raley's, the company isn't particularly dependent on the region.

By contrast, Sacramento is Raley's home turf and has become one of the most competitive markets in the country in recent years, said industry consultant Bob Reynolds. The Bay Area, where Safeway reigns, isn't nearly as crowded, he said.

"The competitive pressures are exceptional in Sacramento," said Reynolds, a former Safeway executive.

Order Story Reprint iconOrder Reprint

Call The Bee'sDale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

___

(c)2012 The Sacramento Bee (Sacramento, Calif.)

Visit The Sacramento Bee (Sacramento, Calif.) at www.sacbee.com

Distributed by MCT Information Services

Wordcount:  865

Newer

Farmers Insurance Prevails In Suit With Former Agent

Advisor News

  • Dutch gambling tax hike falls short as prediction markets eye World Cup
  • Caregiving: A challenge that costs employers billions
  • Could your practice benefit from an advisory board?
  • SEC nears settlement with accused scammer Tai Lopez
  • The 3 things that shrink your Social Security income
More Advisor News

Annuity News

  • Globe Life Inc. (NYSE: GL) Highlighted for Surprising Price Action
  • Trademark Application for “EMPOWER YOUR MONEY” Filed by Empower Annuity Insurance Company of America: Empower Annuity Insurance Company of America
  • Built-in guaranteed annuities: What advisors should know
  • Malibu Life Holdings Completes Acquisition of TruSpire, Establishing Malibu USA and Accelerating Entry into the U.S. Retail Annuity Market
  • Why job boards are failing insurance agencies
More Annuity News

Health/Employee Benefits News

  • State Health Plan brings back Blue Cross NC, approves Novant and UNC Health deals
  • GOVERNOR SIGNS 38 BILLS INTO LAW
  • Premiums rise, but overall costs could fall for NC State Health Plan members under a new system
  • Feds, Ohio Republicans focus on individual cases of Medicaid fraud, but what about corporations?
  • They Harvest the Nation's Food, but a New Rule May Strip Them of Health Insurance
More Health/Employee Benefits News

Life Insurance News

  • THINGS YOUR CLIENTS SHOULD KNOW BEFORE SELLING A LIFE INSURANCE POLICY
  • Could your practice benefit from an advisory board?
  • AM Best Revises Outlooks to Stable for Missouri Farm Bureau Group’s Members and Farm Bureau Life Insurance Company of Missouri
  • Globe Life Inc. (NYSE: GL) Highlighted for Surprising Price Action
  • AM Best Assigns Credit Ratings to China Ping An Insurance (Hong Kong) Company Limited
More Life Insurance News

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

Press Releases

  • Prosperity Life GroupSM Launches Prosperity PathWaySM Series, Bringing Greater Choice and Flexibility to Retirement Income Planning
  • Senior Market Sales® Fortifies Annuity Reach With Acquisition of Retirement Planning Firm Stratton & Company
  • RFP #T01625
  • Rockwood Programs Appoints Kerry Ladouceur as Vice President, Financial Lines
  • JP Insurance Group Launches Commercial Property & Casualty Division; Appoints Joe Webster as Managing Director
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Meet our Editorial Staff
  • Advertise
  • Contact
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2026 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.
Insurance News | InsuranceNewsNet